Risk Appetite

Risk appetite is a gauge of how “risk-hungry” traders are. If risk sentiment is up and times are good, risk appetite picks up and trader are more willing to invest in higher-yielding and/or potentially more volatile assets.

In the http://www.babypips.com/ forex market, this normally means that traders are more willing to invest in currencies that have higher interest rates (i.e. Australian dollar, British pound), equities and commodities.